Bolsonaro, Lula, and Trump: Political Shifts and Trade Tensions Impacting Brazil and the United States

A recent survey conducted by Pulso Brasil-Ipespe showed that the approval rating of Brazil’s Supreme Federal Court (STF) rose from 43% to 46% after the conviction of former president Jair Bolsonaro for attempting a coup d’état. Bolsonaro was sentenced to 27 years and 3 months in prison, along with other high-ranking military officials involved in the plot.

Meanwhile, Brazil’s Chamber of Deputies saw its disapproval rating climb from 63% to 70%, as attempts to pass legislation protecting politicians and coup supporters backfired. Approval fell sharply from 24% to 18%, with most Brazilians feeling Congress is disconnected from citizens’ needs.

Tax Reform and Political Bargaining in Brazil

This week, Brazil’s Senate Economic Affairs Committee approved Senator Renan Calheiros’ proposal to exempt workers earning up to R$5,000 per month (about US$1,000) from paying income tax. However, in the Chamber of Deputies, Bolsonaro-aligned lawmakers have tied the approval of this tax exemption to legislation aimed at reducing penalties for coup participants involved in the January 8th, 2023 attacks on Brazil’s democratic institutions.

Eduardo Bolsonaro’s 2026 Presidential Bid

Journalist Mônica Bergamo reported growing discussions around Eduardo Bolsonaro’s potential presidential run in 2026. Despite facing charges that could make him ineligible, Eduardo insists he will run—with or without the support of his father Jair Bolsonaro or the Liberal Party. He is even considering founding a new political party.
Right-wing leaders argue his candidacy would divide conservatives and potentially help Lula’s reelection, though some believe Eduardo is positioning himself for a stronger run in 2030.

Trump’s Tariffs on Brazilian Products and Their Economic Impact

Former U.S. President Donald Trump has proposed a 50% tariff on Brazilian products, including beef and coffee, echoing past tariffs imposed on Chinese imports. While the policy aims to reindustrialize the U.S., experts say it contradicts economic liberalism and mainly raises costs for American consumers.

Historically, the U.S. used tariffs to protect its nascent industries, but globalization has made such protectionism less viable. Analysts estimate the Brazilian economy could shrink by 0.2% to 0.5% of GDP due to these measures, particularly affecting small industries and retailers. However, key products such as Embraer aircraft and orange juice were exempted, given U.S. dependency on these imports.

Brazilian Beef Exports Grow Despite U.S. Tariffs

The 50% tariff on Brazilian beef initially lowered domestic prices in Brazil but made the product nearly inaccessible to U.S. consumers, fueling inflation in the United States.

Despite these challenges, Brazilian beef exports reached 2.41 million tons from January to August 2024, a 19% increase year-over-year, according to industry group Abrafrigo. August alone, when the tariffs took effect, was the second-best month for exports in 2024.

• China remains the top buyer, importing nearly 1 million tons (+19%), with revenue up 41% to almost US$5 billion.
  
  

• The United States holds the second spot, importing 557,000 tons (+66.5%), generating US$1.6 billion in revenue (+73.2%), despite a 46% drop in August shipments due to tariffs.
  
  

• Other markets such as Mexico, Argentina, Indonesia, and Japan are expanding, supported by government and private sector efforts to diversify Brazil’s export destinations.
  
  

Political and Economic Risks for Bolsonaro and Trump

Both Eduardo Bolsonaro and Donald Trump are facing setbacks that could weaken their political platforms. Eduardo risks fragmenting Brazil’s conservative base, while Trump’s tariffs are driving U.S. inflation and could backfire ahead of the 2026 midterm elections, when voters will choose all 435 House Representatives and one-third of the Senate.

Will Petrobras (PETR3; PETR4) Dividends Stay High in 2025? Forecasts and Investor Insights

Petrobras (PETR3, PETR4) has always been one of the most widely followed companies in Brazil, not only because of its size and influence in the energy sector but also for its dividend payments in recent years. Now moving through 2025 with the same question: How much will Petrobras pay out in dividends this year and what can be expected in 2026?

Dividend Outlook For 2025

Through the first half of 2025, Petrobras declared six dividend distributions in respect of first and second-quarter results, of approximately R$1.58 per share. Market expectations place the company at R$3.40-odd per share for the full year, manifesting a dividend yield of nearly 9.8%. That leaves around R$1.46 per share to be paid in the second half, with roughly R$0.73 each payable in the third and fourth quarter. 

These expectations are based on the current business plan of Petrobras, wherein Brent oil is assumed to be at US$83 per barrel, whereas the average for 2025 has been closer to US$70. A movement of US$5 in Brent prices can lower or increase dividend yields by approximately 1.3 percentage points, putting oil price volatility at the very center of shareholder returns.

BTG Pactual’s Positive View

According to analysts at BTG Pactual, Petrobras benefits from a “positive asymmetry”: higher-than-expected production combined with lower capital expenditures (CAPEX) and operational expenditures (OPEX). This combination could result in higher cash generation and potentially larger dividends than currently priced in by the market.

BTG also set a buy recommendation for Petrobras, with a price target of R$44, suggesting a significant upside from current levels.

Dividend Projections for 2026

Looking ahead, Petrobras’ 2026 dividend will largely depend on oil prices and government strategy.

• In a conservative scenario with Brent below US$70, dividends may drop to around R$1.50 per share (4–7% yield).

• In an optimistic scenario with Brent above US$70, dividends could reach R$3.00–R$4.00 per share (10–15% yield).
  

Given the electoral cycle, some analysts believe the government may push Petrobras to distribute higher dividends in 2026, using the company as a cash source to fund fiscal needs.

However, markets were shaken last week by rumours that Petrobras had to cut back US$8 billion on investments in the 2026-2030 Strategic Plan.

Nevertheless, for long-term investors, Petrobras offers a unique combination of high dividend yield and discounted valuation, but with higher-than-average risks. Oil price volatility, CAPEX and OPEX control, and political uncertainty will continue to shape Petrobras’ performance in 2025 and 2026.

How Trump’s Tariffs on Chinese Imports Have Backfired on U.S. Farmers and helped Brazilian agrobusiness

The American farmers, particularly the soybean producers, paid dearly in recent years as a consequence of the trade war initiated by President Donald Trump. Tariffs on Chinese goods and the retaliatory measures by China have altered the global trade flows to the disadvantage of the U.S. agricultural sector. This article aims at analyzing how the imposition of such tariffs led to the patronage of Brazil and other South American suppliers by China, thus causing a decline in U.S. exports and a depression in prices domestically.

Assemblies at town squares had hundreds of farmers attending to express their concerns about rising debt, outdated agriculture equipment, and shrinking profit. American agriculture produces 40% more than it consumes domestically, and a quarter of the soybeans produced in the US are destined for export, the largest buyer being China. But estimated losses from exports going from about $12-$14 billion to zero because of tariffs from the Chinese side caused a shift to purchases from Brazil, which is now investing heavily in Brazilian and African agriculture. 

After the tariffs imposed by the Trump administration, farmers in the U.S. are now confronted with these steep losses: $375 per acre for cotton; $220 for corn; $120 for soybeans; with the total production costs even well above the market price. While government subsidies, during the previous tariff war under Trump, provided some relief to farmers, the real solution is reinstating international market access for American farmers. For now, there seems to be a big partisan preference favoring Trump among farmers; however, an increasing number are having second thoughts amidst financial hardships.

For the very first time, U. S. soybean farmers are going into the harvest without having sold a single kilogram of soybeans to their main buyer, China. In spite of early expectations for expanded trade, it appears China is boycotting American soybeans.

USDA data show a steady, sharp decline in Chinese purchases, from over 13 million tons in 2020 to almost 8 million in 2021, 11 million in 2022, 6 million in 2023, under 4 million in 2024, and 0 in 2025. Soybean farmers are worried, for China is the world's largest buyer of soybeans and has been the biggest single buyer of U.S. soy.

The American Soybean Association has decided to write a letter to President Trump urging that negotiations begin immediately, as they warn that Brazil is taking over the market. Brazilian exports to China between April and June set a record, with 8 million tons already contracted for September 2025, and another 4 million contracted for October, roughly the amount that the United States used to sell in the same time period.

U.S. soybean prices have already been lowered to below international levels given a weak demand. Farmers fear facing severe financial setbacks if China keeps aside American soybeans, in turn leaving Brazil as the main supplier.

---

Background: The Tariff War Escalates

• The Trump administration levied high tariffs on Chinese imports, part of a broader "America First" trade strategy. yeutter-institute.unl.edu+4Wikipedia+4Successful Farming+4
  
  

• China responded with its own tariffs and trade barriers, particularly targeting key U.S. agricultural products like soybeans. Common Dreams+3iasoybeans.com+3yeutter-institute.unl.edu+3
  
  

---

Shift in Global Supply: From U.S. to Brazil (and Others)

• In 2025, China’s imports of soybeans from Brazil surged, while imports from the U.S. dropped sharply. American Soybean Association+3Reuters+3Successful Farming+3
  
  

• For example, in July 2025, China imported ~11.67 million metric tons of soybeans — its largest July import ever — driven significantly by Brazilian exports. Brazil supplied nearly 90% of those shipments, while U.S. exports lagged far behind — only about 420,000 tons from the U.S. in that same month. Successful Farming+3Hellenic Shipping News+3Reuters+3
  
  

• China has not made new purchase commitments for U.S. soybeans for the upcoming harvest season, largely due to the high tariffs that make U.S.-produced soybeans economically uncompetitive. American Soybean Association+2Successful Farming+2
  
  

---

How U.S. Farmers Are Being Harmed

1. Loss of Market Access

China has traditionally been the largest buyer of U.S. soybeans. With trade tensions and retaliatory tariffs, that market has become far less accessible. This loss of demand has hurt U.S. farmers by:

• Shrinking export volumes. American Soybean Association+2Successful Farming+2
  
  

• Forcing them to compete with Brazilian soybeans, which are now more attractive to Chinese buyers due to lower costs and no high U.S.-China tariffs. Successful Farming+2iasoybeans.com+2
  
  

2. Price Pressure & Oversupply

• Because China is buying less from the U.S., large supplies remain unsold or must be sold at lower prices. This creates downward pressure on soybean futures and on farm incomes. American Soybean Association+1
  
  

• Traders have noted futures prices for U.S. soybeans have dropped significantly during 2025 in light of abundant supply and weak export demand. American Soybean Association+1
  
  

3. Competitive Disadvantage

• U.S. soybeans face tariff disadvantages: China’s retaliatory tariffs raise the cost of U.S. soybeans relative to competitors like Brazil. Successful Farming+1
  
  

• Currency exchange rates, Brazil’s harvest timing, and lower production/transport costs also play roles in making Brazilian soybeans more appealing. U.S. farmers find themselves squeezed. Reuters+1
  
  

4. Uncertainty for Future Crops

• Lack of long-term purchase commitments from China means U.S. farmers face planning difficulties. Decisions about planting, financing, and investment become riskier when major buyers are off the table due to trade policy. American Soybean Association+2Successful Farming+2
  
  

---

The Broader Consequences

• Regions heavily dependent on soybean agriculture (Midwest states like Iowa, Illinois, Minnesota, etc.) are experiencing the ripple effects: lower revenues, increased reliance on government aid, and greater financial stress. iasoybeans.com+2American Soybean Association+2
  
  

• U.S. export revenues from soybeans and related agricultural products have diminished, contributing to trade imbalances and affecting rural communities. Successful Farming+1
  
  

---

Possible Remedies and What’s at Stake

• Negotiating a reduction or waiver of the Chinese retaliatory tariffs could help restore competitiveness for U.S. soybeans. Successful Farming+1
  
  

• Diversifying export markets beyond China may help U.S. farmers mitigate dependency risk. Some markets in Asia, the EU, or elsewhere could absorb more soybean exports if trade conditions permit. Successful Farming
  
  

• Domestic policy support (subsidies, price insurance, infrastructure improvements) could alleviate short-term losses — though these are often costly and politically contentious.
  
  

• There’s a broader strategic issue: persistent trade tensions reduce predictability for farmers, which can discourage investment in agriculture and harm long-term competitiveness.
  
  

---

While the Trump administration’s tariffs were intended to protect U.S. industries and rebalance trade relations with China, the unintended consequences for U.S. soybean farmers have been severe. Tariffs set off a chain reaction: China buys less from the U.S., turns to Brazil and other suppliers, U.S. farmers lose market share and face falling prices, and rural communities suffer economic strain. Unless the U.S. adapts, either through policy changes, diplomatic compromise, or market diversification, these harms may continue to multiply.

Corn Ethanol in Brazil: Sustainable Biofuels Driving Food, Feed, and Fuel Production

Since 2017, the corn ethanol industry has gone through rapid growth in Brazil, establishing itself as the delicate foundation of the country's bioeconomy. Representing 98% of the companies producing ethanol from corn in Brazil, the Brazilian Corn Ethanol Association (UNEM) has been supporting the cause of environmentally sustainable fuel production and at the same time markets for food and feed.

Brazil currently has 21 ethanol plants utilizing corn, with half devoted only to corn ethanol and the other half flex plants that convert ethanol from sugarcane as well. Another 22 plants have now been planned or are under construction and shall raise production from 2.2 billion gallons presently to about 3.5 billion gallons in the coming years.

Those plants frequently employ renewable power sources, such as eucalyptus wood chips, hence lessening carbon footprints. Brazil plans also to sell carbon credits, thereby rendering the price of its ethanol lower worldwide, particularly for market areas such as Europe and California.

Now, Brazilian ethanol may gain stronger competition in the international platform. Overall, the establishment of the corn ethanol industry in Brazil has very steady growth, thus adding value to the domestic corn and its consequent production as a source of renewable fuels.

A Decade of Growth: The Period from Inception to Growth

Although still a young industry, Brazilian corn ethanol development has been quite impressive. Productivity has increased by 87% during this century, and the cultivated area in corn has also expanded by about 70%. Such intense evolution has been the result of modern biotechnology, new agricultural practices, and the introduction of corn ethanol production technologies from the USA.

This industry is not only intensifying crop production but is also enhancing land-use efficiency. Unique to Brazil is a double cropping system wherein two crops can be harvested in one year on the same land. For instance, soybean in summer and corn in winter, allowing livestock to graze in between. In some areas, corn is planted also as a third crop to increase productivity without any deforestation.

Corn Ethanol: Food, Feed, and Fuel

A common concern among international audiences is the so-called “food versus fuel” debate. In Brazil, this conflict is largely mitigated through sustainable production systems. Corn ethanol production generates multiple outputs:

• Ethanol fuel: 440 liters per ton of corn
• DDGS (Distillers Dried Grains with Solubles): 212 kg per ton of corn, a highly nutritious animal feed
• Corn oil: 19 kg per ton of corn
• Excess electricity: Supplied back to the grid

By using renewable sources like wood chips and even bamboo for steam production, Brazilian corn ethanol plants create a circular, environmentally sustainable system that provides fuel, food, and feed.

Expanding Production and Global Exports

Currently, Brazil operates 24 corn ethanol plants, with another 16 under construction and an additional 16 planned. Production is spreading geographically, from the central west region to the northeast, south, and north of Brazil, while also incorporating alternative crops such as sorghum and wheat for ethanol production.

The DDGS export market is growing rapidly, especially in Asia. In just four years, exports rose from $1 million to nearly $190 million. China alone has shown interest in purchasing 5 million tons of DDGS, highlighting Brazil's potential to become a global leader in renewable feed and biofuels.

Flex-Fuel Technology and Sustainability

Brazilian vehicles, 77% of which are flex-fuel, can run on either ethanol or gasoline. This flexibility reduces greenhouse gas emissions and positions Brazil as a global leader in sustainable mobility. Moreover, ethanol-fed DDGS allows livestock to be produced more efficiently, reducing the carbon footprint per animal while meeting international food demands.

Looking Ahead: Innovation and Carbon Reduction

The future of Brazilian corn ethanol includes:

• Sustainable aviation fuels to reduce emissions in the aviation sector
• Maritime biofuels for shipping industries
• Bioenergy with carbon capture and storage (BECCS): The first plant will become carbon-negative by capturing CO₂ from ethanol production and storing it underground

With the government increasing ethanol content in gasoline to 30% and the upcoming COP 30 in Brazil, the industry is well-positioned to accelerate renewable energy adoption while supporting the food-plus-fuel model, simultaneously producing fuel, feed, and food sustainably.

Brazil’s corn ethanol industry demonstrates that biofuel production can coexist with agricultural growth, environmental sustainability, and global trade expansion. With increasing domestic production, international exports, and ongoing technological innovation, Brazilian corn ethanol is setting a benchmark for the world in sustainable bioenergy solutions.

Petrobras (PETR3; PETR4) and Brazil’s Path to Renewable Energy and Net Zero by 2050

During an online session parallel to the G20 Summit in Rio de Janeiro, Petrobras, the state oil company of Brazil, highlighted its just energy transition strategy. The discussion aimed to present challenges and opportunities for Brazil in the global competition toward a low-carbon future and featured Viviana Coelho, Executive Manager of Decarbonization, and Renan Pinheiro Silvério, the Chief Economist of the company.

This week, Petrobras has publicly presented its practicing view of a balanced energy future. Over the G20 week in Rio de Janeiro, company leaders and climate experts emphasized that a strong and fair energy transition is necessary to make Brazil's climate commitments real and also to shield the economy from shocks in a changing global energy market. Recent studies by economists Carlos Eduardo Young and Helder Queiroz at UFRJ in partnership with the Energy Working Group of Observatório do Clima propose urgent avenues for transitioning Petrobras from an oil and gas company into a diversified energy powerhouse.

According to the two utmost findings, namely "Key Issues and Alternatives for Decarbonizing Petrobras’ Investment Portfolio" and “The Petrobras We Need,” Petrobras in its present avatar are against Brazil's climate goals: 

As per the 2025‐2029 business plan, Petrobras was to invest US$ 111 billion, with only about US$ 9.1 billion being dedicated toward the low‐carbon energy sectors. 

However, the present Brazilian plan is at odds with the National Determined Contribution (NDC) and the National Mitigation Strategy ("Plano Clima") for deeper reduction of greenhouse gas emissions and recognition of their neutrality by the year 2050. 

---

What Is the Energy Transition?

Viviana explained that the energy transition is the global effort to shift toward a low-carbon economy, drastically reducing greenhouse gas emissions, particularly CO₂ and methane. Energy use is responsible for nearly 70% of global emissions.

Brazil, however, stands out as a positive example:

• Over 90% of the country’s electricity already comes from clean sources.
  
  

• Nearly 50% of its total energy mix is decarbonized, which is far above the global average.
  
  

---

Global Challenges

Renan emphasized that this is the first energy transition not driven by pure economic convenience:

• Past transitions, from wood to coal to oil, happened because each new source was more efficient and practical.
  
  

• Today, change is driven by climate commitments, social responsibility, and innovation.
  
  

He also noted that there is no “one-size-fits-all” solution. Each country must adapt according to its resources. In Brazil, biofuels and ethanol are key differentiators.

---

Brazil’s Four Strategic Fronts

According to Viviana, Brazil must advance on four main fronts:

1. Energy efficiency – reducing consumption without reducing quality of life (e.g., better public transportation).
   
   

2. Electrification – expanding electricity use in sectors still dominated by fossil fuels.
   
   

3. Molecule substitution – replacing fossil fuels with biofuels or hydrogen.
   
   

4. CO₂ capture – both through industrial solutions (CCS) and natural carbon sinks like forests.
   
   

---

Petrobras’ Role in the Transition

Petrobras announced that 10–15% of its investment portfolio is now dedicated to the energy transition. Key initiatives include:

• Expanding wind and solar energy.
  
  

• Investing in biofuels and sustainable aviation fuel (SAF).
  
  

• Developing hydrogen projects.
  
  

• Enhancing carbon capture and storage (CCS).
  
  

• Decarbonizing offshore platforms and improving operational efficiency.
  
  

Viviana highlighted that Brazil’s pre-salt oil fields emit half the global average CO₂ per barrel, and Petrobras has already reduced its emissions by 40% since 2009, equivalent to eliminating all emissions from Brazil’s domestic aviation sector.

---

Looking Ahead

While renewable energy will continue to expand, oil and gas will remain crucial in Brazil’s energy matrix until 2050. The challenge for Petrobras and Brazil is not to abandon these fuels outright but to produce them more cleanly and efficiently, while simultaneously scaling up in new energy markets.

---

A Just Transition

Petrobras should emphasise the importance of a just energy transition, one that considers the economic and social realities of each country and population. The goal is to prevent vulnerable groups from bearing disproportionate costs as Brazil advances toward decarbonization.

The Recommendations for Petrobras’ Decarbonization Path and the studies propose a set of strategic moves for the Brazilian company to align with global climate trajectories and secure a more resilient business model are:

• Increase investment in research, development and innovation for low‐carbon technologies, especially second and third-generation biofuels and green hydrogen; 

• Expand into distribution, recharging terminals, and consumer‐facing infrastructure, possibly by reacquiring BR Distribuidora or building new terminals; 

• Align Business Plans with Ambitious Climate Policies;

• Petrobras should not only meet Brazil’s NDC and the Paris Agreement’s goals but aim to exceed expectations; 

• Prioritize Low-Carbon Energy Sources;

• Emphasize renewables (wind, solar), SAF (sustainable aviation fuels), and biofuels, especially newer, advanced ones; 

• Reassess Refining Plans and Fossil Expansion;

• Redirect or reduce planned investments in new refineries;

• Freeze fossil fuel extraction expansion into new frontiers (e.g. Foz do Amazonas). Focus production in those already productive areas like the pre-salt region;

• Ensure that the transition is just and inclusive, such that poorer populations are not disproportionately harmed;

• Use fossil fuel revenues (royalties, taxes) more directly toward mitigation, adaptation, and control of deforestation; 

• Continue improving the operational efficiency of oil and gas production so that emissions per barrel are reduced.

---

Petrobras Positions Itself for the Future

By combining investments in renewables, biofuels, and innovative technologies with efforts to reduce emissions from oil and gas, Petrobras seeks to position itself as a global leader in sustainable energy. With its unique resources and energy mix, Brazil has the potential to become a reference point in the global energy transition, balancing economic development, energy security, and environmental responsibility.

It is the period of decision for Petrobras. It can continue down the high-carbon path, which is economically and socially risky, or it can lead the transformation into a more diversified and resilient model that takes advantage of Brazil's strengths (renewables, biofuels, biodiversity, technical capacity), with decarbonization and justice at its core. The UFRJ and Observatório do Clima reports give a very clear roadmap. The G20 declarations seem to confirm that Petrobras has some of these thoughts. The next step is to translate these intentions into machinery of large-scale action.